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Performance Audit Recommends Millions in Savings for Parma City School District

Thursday, March 30, 2017

Columbus – State auditors today offered $6 million in savings recommendations to help the Parma City School District (Cuyahoga County) alleviate its financial stress.

The performance audit released today by Auditor of State Dave Yost proposes 18 ways to reverse the district’s growing deficit, including staffing reductions and changes to the ways it funds extracurricular activities. The district has already begun implementing several cost-saving measures in line with the performance audit recommendations.

“The smartest financial decisions are often the hardest to make,” Auditor Yost said. “But history has shown the recovery process is typically easier in the long run when those decisions are made sooner rather than later. I’m pleased to see the district is already taking steps in the right direction.”

Auditors suggested the district consider eliminating general fund subsidies of $2.1 million for extracurricular activities. The report lists several ways this could be accomplished, such as increasing pay-to-play fees to fully cover the cost of participation in each activity.

Additional savings are possible if the district eliminates the following full-time staff positions:

23 general education teacher positions:$1.3 million

18 technical positions: $896,430

23 office/clerical positions:$843,954

5 professional staffing positions:$450,299

2 non-certificated classroom support positions:$71,695

The Auditor’s office, in consultation with the Ohio Department of Education (ODE), decided in April 2016 to conduct a performance audit of the district to improve its declining financial condition.

The district’s May 2016 five-year financial forecast projected a cumulative deficit exceeding $48 million by fiscal year 2020. Based on that forecast, ODE placed the district in fiscal caution on Aug. 1, 2016. The district’s board of education approved a financial recovery plan on Oct. 27, 2016.

The district anticipates the full impact of the recovery plan will reduce the deficit from $48 million to $11.6 million. The portion of the plan implemented since October 2016 has already lowered the deficit to $22 million. The financial recovery plan includes further reductions starting next school year.

Fully implementing the performance audit recommendations would eliminate the deficit and result in a positive ending fund balance of $1.5 million by the end of the period.

This is the fourth performance audit of the school district. The Auditor’s office previously conducted full performance audits in 1998 and 2011, and a limited scope performance audit was completed in 2010 at the district’s request.

The Auditor of State’s office, one of five independently elected statewide offices in Ohio, is responsible for auditing more than 5,900 state and local government agencies. Under the direction of Auditor Dave Yost, the office also provides financial services to local governments, investigates and prevents fraud in public agencies and promotes transparency in government.